Oil Edges Lower After Six-Day Gain With Hormuz Impasse in Focus

(Bloomberg) — Oil took a breather after a six-session gain, with futures edging lower as traders waited for signs of progress on reopening the Strait of Hormuz.

Brent fell below $88 a barrel, after rising 12% over the previous six sessions, while West Texas Intermediate was near $82 a barrel. On the diplomatic front, there was little sign of progress on reopening the waterway, with President Donald Trump saying the US has “total control” over the conduit.

Talks between the US and Iran appear deadlocked as both sides harden their positions, with Washington pressing on with a blockade of the Islamic Republic’s ports to raise the economic pressure on Tehran. Pakistan — which has acted as a mediator — said the larger peace process had stalled, although a deadline for a US-Iran memorandum of understanding could be extended.

Crude is still headed for a weekly gain after months of volatile trading, with traders tracking on-off efforts by Tehran and Washington toward ending their conflict. The war in the Middle East, coupled with fighting between Ukraine and Russia that’s seen waves of strikes against energy infrastructure including ports and refineries, have tightened oil and product markets.

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“Volatility looks set to remain a defining feature” until diplomatic efforts lead to the reopening of Hormuz and production visibility improves, said Charu Chanana, chief investment strategist at Saxo Markets. Weaker demand added to concerns, as higher prices are already destroying consumption, she said.

The global oil market faces a shortfall of 1.8 million barrels a day this quarter, more than double an earlier projection as the US-Iran war drags on, according to the International Energy Agency, which also cautioned that crude demand was being eroded by higher prices. For 2026 as a whole, the deficit will likely be the widest in five years, the IEA said in a report on Wednesday.

Still, US oil stockpiles swelled 17.4 million barrels last week, the largest gain since January 2023, according to the Energy Information Administration. The build was mostly on the Gulf Coast, driven by weaker exports and rising imports, including the return of Saudi oil and Venezuelan crude.

For US consumers, gasoline and diesel have never been this expensive, this late in the year, according to the American Automobile Association. That comes as millions of Americans typically take to the road for vacations and family visits.

“Oil and product markets are set to see upside,” said Bart Melek, global head of commodity strategy at TD Securities, citing factors including crude deficits heading back toward 4 million barrels a day.